Unfortunately, climate policy really is a matter of money, and Europe doesn't have any to spare right now

A protester gestures in front of a banner outside the UN-led climate talks in Durban, South Africa / Reuters

Who will lead the world on climate change? The U.S. Democratic party's will and strength for big legislation is still sapped by the health care push and the ongoing spending fights. Booming China, which will become the world's largest greenhouse gas emitter in 2009 -- though still behind U.S. on a per-capita basis -- has always seen plenty of incentive to not bow to after-the-fact Western moans about carbon caps.* The European Union and its member states have long been the among the few encouraging political actors for environmentalists.

But, as the United Nations climate talks in Durban currently underway now show, when it comes to international carbon agreements, you might not even be able to count on Europe any more.

"We must certainly lower our expectations of what 'success' is," German chancellor Angela Merkel said over the weekend. Though Merkel went on to describe reluctance among "emerging market" nations to accept binding targets, German reports on the comment recognize a new emerging reality: the problem isn't just the developing nations -- the problem is that Europe isn't really in a position to lead at present. Public and political attention is focused on the debt crisis and the specter of austerity-led recession. Resources that might have gone into helping poorer nations deal with climate change or promoting alternative energy innovations are already pledged to bailouts.

"Who knows what's going on with climate change?" asked French paper Libération last Monday. "With the euro and sovereign debt crisis, it's dropped out of the international agenda." The writer declared that the Durban negotiations opened amid "relative indifference." Though the EU remains the only actor with any clout willing to make a real reduction commitment, and stands on the side of small island states in wanting a legal deal finalized by 2015, climate change has, out of necessity, dropped a few rungs on its list of priorities. "Since the Copenhagen summit and with the current economic crisis, we've seen a real slackening: in France it's not a subject, in Europe it's not a subject, in the U.S. it's even worse," the Libération piece quoted an unnamed French diplomat as saying.

To be sure, there was pessimism about binding international agreements long before this. But in addition, notes Andreas Mihm in Durban-based analysis for German paper Die Zeit, "the large industrial states have, in the face of the sovereign debt crisis, slashed budgets for climate control." Germany, unsurprisingly for those who have been following the crisis, remains the best positioned to continue marking money for environmental purposes, but one has to wonder how many mouths, exactly, Europe's de facto banking country can continue to feed. Mihm points out that Germany is already cutting its climate change budget back by 1.5 billion euros, while elsewhere in Europe "the cuts are even deeper" -- 3.8 billion euros reassigned in Spain, and 3.1 billion likely to be pulled in the UK.

Unfortunately, climate policy really is a matter of money, and how much a country can, politically and financially, afford. It's not just that things like carbon taxes or caps, for example, temporarily take chunks of potential productivity out of the economy; even many economists feel a so-called Pigovian tax on emissions would be an appropriate way to balance out the "externality" of climate change, which is left unaccounted for in traditional market models. There's also a large financial component to the proposed international agreements at this point: developing nations want and in many cases need loans to adapt to climate change and to nudge their economies in the direction of lower emissions. Even within developed countries, enacting policies to meet such targets is expensive: there are alternative energy subsidies to consider, incentives to manipulate, and even carbon markets to create and regulate.

The French Minister for Ecology, Nathalie Kosciusko-Morizet, has been quoted admitting on Friday that there is a risk of "explosion" in the European bloc due to internal divisions.

As the French paper Libération observes, even if Europe were to stick to its proposed course, that would account for only 16 percent of global emissions. What international climate policy requires is momentum and forceful leadership. Where, exactly, is that likely to be found in the present political climate?

*Monday, China did offer up at least a show of cooperation, suggesting, as reported by the Wall Street Journal, that it might accept legally binding reductions after 2020 if the U.S. and others made progress in the meantime.

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